State Bank of India - Research Paper Example

The paper "State Bank of India" is an outstanding example of a marketing research paper. The banking sector is the backbone of any nation’s economy and the State Bank of India (SBI) is one of the large public sector banks of India. The given case-study by Lal & Tahilyani (2011) describes not only the issues that the bank was facing after economic liberalization but also the process its Chairman O. P Bhatt adopted for its transformation between 2006 and 2011. After independence at least until 1991, it continued to have a major chunk of banking business; however, after opening up of the economy in 1991, SBI began losing its market share in deposits as well as advances.

On various fronts such as ‘profit per employee and ‘return on assets, the bank's performance went on deteriorating steadily; the non-performing asset (NPA) ratio went on increasing. Bank was not performing anywhere close to some of the private banks such as HDFC Bank and ICICI Bank. In a way, the liberalization process exposed the bank's weaknesses as it began facing competitive pressures from private banks. Post-1991, India was transforming rapidly on two fronts: the economic liberalisation process had opened the markets with increased business activities across the country, and the second – India was rapidly becoming an IT hub and the epicentre of IT industries outside the US.

SBI failed to take the stock of the rapidly changing business environment in the country and did not mend its ways in line with the new market requirements. Moreover, the ageing staff was quite reluctant to accept any change in their established way of functioning. It was necessary that the existing staff is convinced before initiating any changes in the bank. In such situations, SBI needed a strong transformational leader with a higher emotional quotient that not only knew human psychology and mastered modern motivational theories but also aware of the current marketing practices.

The paper explores some of the important marketing tools/models that can be employed to find not only the issues within the SBI but also can be used to improve its performance significantly. Prominent of them are SWOT, PESTEL, the BCG Matrix, and the Porter's Five Forces Model. A Strategic Management perspective for any bank is equally important while formulating marketing strategies (Bonn, 2001).